State‐Level Estimates of Annual Medical Expenditures Attributable to Obesity*

Objective: To provide state‐level estimates of total, Medicare, and Medicaid obesity‐attributable medical expenditures. Research Methods and Procedures: We developed an econometric model that predicts medical expenditures. We used this model and state‐representative data to quantify obesity‐attributable medical expenditures. Results: Annual U.S. obesity‐attributable medical expenditures are estimated at $75 billion in 2003 dollars, and approximately one‐half of these expenditures are financed by Medicare and Medicaid. State‐level estimates range from $87 million (Wyoming) to $7.7 billion (California). Obesity‐attributable Medicare estimates range from $15 million (Wyoming) to $1.7 billion (California), and Medicaid estimates range from $23 million (Wyoming) to $3.5 billion (New York). Discussion: These estimates of obesity‐attributable medical expenditures present the best available information concerning the economic impact of obesity at the state level. Policy makers should consider these estimates, along with other factors, in determining how best to allocate scarce public health resources. However, because they are associated with large SE, these estimates should not be used to make comparisons across states or among payers within states.     

Out-of-pocket health care expenditures due to excess of body weight in Portugal

The prevalence for excessive weight has also been increasing dramatically in Portugal over the last decades. The consequences for families as well as for the publicly funded Portuguese health care system are a matter of policy interest. This paper uses an econometric model to compute the fraction of the national out-of-pocket health care expenditures attributable to overweight and obesity among Portuguese adults. Given that public health care system pays for a substantial share of the national health care expenditures, the estimated the out-of-pocket expenditures is only a share of the total expenditures. Per-capita expenditures and the burden that obesity and overweight impose on families are also estimated. Two waves of the Portuguese National Health Survey (NHS), namely; 1995/1996 and 1998/1999 are considered. The results suggest that out-of-pocket expenditures due to excess weight have increased sharply during these 3 years. The two-part model estimates suggest that the obese and overweight are more likely to incur out-of-pocket health care expenditures but, in the restricted sample of those that incur expenditures, there is weak or no evidence that the obese or overweight spend, on average, more than those of normal weight. Overall, it is estimated that in 1995/1996, more than 1.8% out-of-pocket health care expenditures were attributable to obesity and 2% to overweight (although not statistically significant). The estimated percentages are over 2.9% for obesity and 4% for overweight in 1998/1999. Combined, the estimated attributable percentage of national out-of-pocket expenditures due to excess weight was 3.8% in 1995/1996 and 6.9% in 1998/1999. Per-capita expenditures due to obesity or overweight are small, on average, in absolute terms, but they can be a significant cost for low income families. With respect to public policy concerns, the results suggest that measures which only slightly increase the out-of-pocket health care expenditures of being obese (overweight) are likely to be inefficient.     

Lifetime medical costs of obesity: prevention no cure for increasing health expenditure

Background

Obesity is a major cause of morbidity and mortality and is associated with high medical expenditures. It has been suggested that obesity prevention could result in cost savings. The objective of this study was to estimate the annual and lifetime medical costs attributable to obesity, to compare those to similar costs attributable to smoking, and to discuss the implications for prevention.

Methods and Findings

With a simulation model, lifetime health-care costs were estimated for a cohort of obese people aged 20 y at baseline. To assess the impact of obesity, comparisons were made with similar cohorts of smokers and “healthy-living” persons (defined as nonsmokers with a body mass index between 18.5 and 25). Except for relative risk values, all input parameters of the simulation model were based on data from The Netherlands. In sensitivity analyses the effects of epidemiologic parameters and cost definitions were assessed. Until age 56 y, annual health expenditure was highest for obese people. At older ages, smokers incurred higher costs. Because of differences in life expectancy, however, lifetime health expenditure was highest among healthy-living people and lowest for smokers. Obese individuals held an intermediate position. Alternative values of epidemiologic parameters and cost definitions did not alter these conclusions.

Conclusions

Although effective obesity prevention leads to a decrease in costs of obesity-related diseases, this decrease is offset by cost increases due to diseases unrelated to obesity in life-years gained. Obesity prevention may be an important and cost-effective way of improving public health, but it is not a cure for increasing health expenditures.     

The return on investment of a Medicaid tobacco cessation program in Massachusetts

Background and Objective

A high proportion of low-income people insured by the Medicaid program smoke. Earlier research concerning a comprehensive tobacco cessation program implemented by the state of Massachusetts indicated that it was successful in reducing smoking prevalence and those who received tobacco cessation benefits had lower rates of in-patient admissions for cardiovascular conditions, including acute myocardial infarction, coronary atherosclerosis and non-specific chest pain. This study estimates the costs of the tobacco cessation benefit and the short-term Medicaid savings attributable to the aversion of inpatient hospitalization for cardiovascular conditions.

Methods

A cost-benefit analysis approach was used to estimate the program''s return on investment. Administrative data were used to compute annual cost per participant. Data from the 2002–2008 Medical Expenditure Panel Survey and from the Behavioral Risk Factor Surveillance Surveys were used to estimate the costs of hospital inpatient admissions by Medicaid smokers. These were combined with earlier estimates of the rate of reduction in cardiovascular hospital admissions attributable to the tobacco cessation program to calculate the return on investment.

Findings

Administrative data indicated that program costs including pharmacotherapy, counseling and outreach costs about $183 per program participant (2010 $). We estimated inpatient savings per participant of $571 (range $549 to $583). Every $1 in program costs was associated with $3.12 (range $3.00 to $3.25) in medical savings, for a $2.12 (range $2.00 to $2.25) return on investment to the Medicaid program for every dollar spent.

Conclusions

These results suggest that an investment in comprehensive tobacco cessation services may result in substantial savings for Medicaid programs. Further federal and state policy actions to promote and cover comprehensive tobacco cessation services in Medicaid may be a cost-effective approach to improve health outcomes for low-income populations.     

Economic Costs of Childhood Diseases and Disabilities Attributable to Environmental Contaminants in Washington State, USA

This study estimates the economic costs associated with childhood diseases and disabilities attributable to environmental contaminants in Washington State, USA, including asthma, cancer, lead exposure, birth defects, and neurobehavioral disorders. The estimates are based on “cost of illness” models that include direct healthcare costs and indirect costs. The estimates are also based on an “environmentally attributable fraction” model which quantifies the proportions of each disease or disability that can reasonably be attributed to environmental contaminants. The study concludes that the annual cost of selected childhood diseases and disabilities attributable to environmental contaminants in Washington State is $1875 million in 2004 $, comprising $310.6 million in direct healthcare costs and $1565 million in indirect costs, and with a range of $1600–$2200 million a year. These estimates are consistent with other studies. Like the previous studies, a significant proportion of the estimated costs can be attributed to lead exposure. This estimate is equivalent to about 0.7% of the total Washington Gross State Product, and the estimated direct healthcare costs are equivalent to at least 0.2% of the total Washington State health expenditures. These costs could be lessened or prevented if exposures to environmental contaminants were reduced or eliminated. This study argues for the need for an ecosystem approach to human health in which the condition of the environment, in terms of exposures to environmental contaminants, must be addressed taking a systemic perspective.     

An administrative claims model for profiling hospital 30-day mortality rates for pneumonia patients

Background

Outcome measures for patients hospitalized with pneumonia may complement process measures in characterizing quality of care. We sought to develop and validate a hierarchical regression model using Medicare claims data that produces hospital-level, risk-standardized 30-day mortality rates useful for public reporting for patients hospitalized with pneumonia.

Methodology/Principal Findings

Retrospective study of fee-for-service Medicare beneficiaries age 66 years and older with a principal discharge diagnosis of pneumonia. Candidate risk-adjustment variables included patient demographics, administrative diagnosis codes from the index hospitalization, and all inpatient and outpatient encounters from the year before admission. The model derivation cohort included 224,608 pneumonia cases admitted to 4,664 hospitals in 2000, and validation cohorts included cases from each of years 1998–2003. We compared model-derived state-level standardized mortality estimates with medical record-derived state-level standardized mortality estimates using data from the Medicare National Pneumonia Project on 50,858 patients hospitalized from 1998–2001. The final model included 31 variables and had an area under the Receiver Operating Characteristic curve of 0.72. In each administrative claims validation cohort, model fit was similar to the derivation cohort. The distribution of standardized mortality rates among hospitals ranged from 13.0% to 23.7%, with 25^th, 50^th, and 75^th percentiles of 16.5%, 17.4%, and 18.3%, respectively. Comparing model-derived risk-standardized state mortality rates with medical record-derived estimates, the correlation coefficient was 0.86 (Standard Error = 0.032).

Conclusions/Significance

An administrative claims-based model for profiling hospitals for pneumonia mortality performs consistently over several years and produces hospital estimates close to those using a medical record model.     

Animal board invited review: Dairy cow lameness expenditures,losses and total cost

Lameness is one of the most costly dairy cow diseases, yet adoption of lameness prevention strategies remains low. Low lameness prevention adoption might be attributable to a lack of understanding regarding total lameness costs. In this review, we evaluated the contribution of different expenditures and losses to total lameness costs. Evaluated expenditures included labor for treatment, therapeutic supplies, lameness detection and lameness control and prevention. Evaluated losses included non-saleable milk, reduced milk production, reduced reproductive performance, increased animal death, increased animal culling, disease interrelationships, lameness recurrence and reduced animal welfare. The previous literature on total lameness cost estimates was also summarized. The reviewed studies indicated that previous estimates of total lameness costs are variable and inconsistent in the expenditures and losses they include. Many of the identified expenditure and loss categories require further research to accurately include in total lameness cost estimates. Future research should focus on identifying costs associated with specific lameness conditions, differing lameness severity levels, and differing stages of lactation at onset of lameness to provide better total lameness cost estimates that can be useful for decision making at both the herd and individual cow level.     

Long-term care for the elderly. The future of nursing homes.

Continuing growth in the number of impaired elderly persons necessitates a continued reliance on nursing homes to care for at least those who are most impaired or most lacking in other supports, despite dissatisfaction over the quality of nursing home services and anxiety about the costs. Nursing home care now costs more than $30 billion annually, half of which comes from governmental sources. The Medicaid program, in particular, is central to all aspects of the nursing home industry. Private long-term care insurance is unlikely to solve the problem of nursing home financing. Rationalizing public expenditures will hinge critically on greater clarity as to just what roles nursing homes are expected to fulfill in the system of care, especially how they are supposed to relate to other services provided to Medicare beneficiaries.     

Moderate and Severe Obesity Have Large Differences in Health Care Costs

Objective: To analyze health care use and expenditures associated with varying degrees of obesity for a nationally representative sample of individuals 54 to 69 years old. Research Methods and Procedures: Data from the Health and Retirement Study, a nationwide biennial longitudinal survey of Americans in their 50s, were used to estimate multivariate regression models of the effect of weight class on health care use and costs. The main outcomes were total health care expenditures, the number of outpatient visits, the probability of any inpatient stay, and the number of inpatient days. Results: The results indicated that there were large differences in obesity‐related health care costs by degree of obesity. Overall, a BMI of 35 to 40 was associated with twice the increase in health care expenditures above normal weight (about a 50% increase) than a BMI of 30 to 35 (about a 25% increase); a BMI of over 40 doubled health care costs (～100% higher costs above those of normal weight). There was a difference by gender in how health care use and costs changed with obesity class. The primary effect of increasing weight class on health care use appeared to be through elevated use of outpatient health care services. Discussion: Obesity imposes an increasing burden on the health care system, and that burden grows disproportionately large for the most obese segment of the U.S. population. Because the prevalence of severe obesity is increasing much faster than that of moderate obesity, average estimates of obesity effects obscure real consequences for individuals, physician practices, hospitals, and health plans.     

Medicine's Role in Health Care Cost Containment

During the 20th century, medicine has confronted a series of problems threatening health care delivery in the United States. Historically, crises developed related first to quality of care, later to access and finally to the current issue of cost. Factors responsible for the large increases in health care expenditures in the United States during the last decade include increased medical care costs, population and demand for care. Additionally, economy-wide inflation, advanced medical technologies, an aging population, the growth of health care facilities, expansion of third-party payment systems including Medicare and Medicaid and rising incomes per capita have occurred. Programs now exist, and others are being planned, through which physicians, individually in private practice and collectively through organized medicine, may confront this major challenge now threatening the very foundations of health care delivery in the United States.     

The Effect of Obesity and Cardiometabolic Risk Factors on Expenditures and Productivity in the United States

Objective: To examine the effect of obesity and cardiometabolic risk factors on medical expenditures and missed work days. Methods and Procedures: The 2000 and 2002 Medical Expenditure Panel Survey (MEPS), a nationally representative survey of the US population, was used to estimate the marginal effect of obesity (BMI ≥ 30) on annual per‐person medical expenditures and missed work days for patients with diabetes, dyslipidemia, or hypertension using multivariate regression methods controlling for age, sex, race, ethnicity, education, income, insurance, and smoking status. Maximum Likelihood Heckman Selection with Smearing retransformation was used to assess medical expenditures, and Negative Binomial regression was used for missed work days. Results: Normal weight individuals with diabetes, dyslipidemia, or hypertension had significantly greater medical expenditures than those without the respective condition ($6,006 (5,124–6,887), $4,760 (4,102–5,417), $3,911 (3,345–4,476)) and obesity significantly exacerbated this effect ($7,986 (7,397–8,574), $7,636 (7,072–8,200), $6,197 (5,745–6,649); $2007; all P < 0.05). In addition, diabetes, dyslipidemia, and hypertension resulted in greater missed work days (3.1 (0.94–6.21), 3.2 (0.42–7.91), 1.4 (0.0–3.52)) (all P < 0.05 except hypertension), which resulted in greater lost productivity ($433, $451, $199) and obesity significantly exacerbated the deleterious effect on work days (8.7 (4.44–15.2), 5.5 (2.18–10.5), 4.5 (2.92–6.34)) and lost productivity ($1,217, $763, $622) (all P < 0.05). In addition, medical expenditures increased for increasing weight category and increasing number of risk factors. Discussion: Obesity significantly exacerbates the deleterious effect of diabetes, dyslipidemia, and hypertension on medical expenditures and productivity loss in the United States. Obesity is preventable and public health efforts need to be undertaken to prevent its alarming increase in order to reduce the incidence and effect of cardiometabolic risk factors.     

Breast Cancer Attributable Costs in Germany: A Top-Down Approach Based on Sickness Funds Data

Background

Breast cancer is the leading cause of death from cancer among women in Germany. Despite its clinical and economic relevance, no attributable costs for breast cancer have been reported for Germany so far. The objective of this study is to estimate age-specific breast cancer attributable health expenditures for Germany.

Methods

Sickness fund data from 1999 representing about 26 million insured (i.e. 32% of the total German population) have been analysed using generalized additive models and the error propagation law. Costs have been inflated to 2010.

Results

Breast cancer attributable costs decreased with age. Among breast cancer patients aged 30–45 years, about 90% of all health expenditures were due to breast cancer, whereas in breast cancer patients aged 80–90 years, about 50% were due to breast cancer. Breast cancer attributable costs amounted to about €9,000 annually for patients below 55 years of age and declined to about €3,000 in 90-year-old breast cancer patients.

Conclusion

This analysis provides estimates of attributable breast cancer costs in Germany. Compared with the international literature, the estimates were plausible but had a tendency to underestimate breast cancer attributable costs.     

The lifetime medical cost burden of overweight and obesity: implications for obesity prevention

This study quantifies age-specific and lifetime costs for overweight (BMI: 25-29.9), obese I (BMI: 30-34.9), and obese II/III (BMI: >35) adults separately by race/gender strata. We use these results to demonstrate why private sector firms are likely to underinvest in obesity prevention efforts. Not only does the existence of Medicare reduce the economic burden that obesity imposes on private payers, but, from the perspective of a 20-year-old obese adult, the short-term costs of obesity are small. This suggests that legislation that subsidizes wellness programs and/or mandates coverage for obesity treatments might make all firms better off. Ironically, Medicare has a greater incentive to prevent obesity because when an obese 65 year old enters the program, his/her costs are immediate and higher than costs for normal weight individuals.     

Direct Healthcare Cost of Obesity in Brazil: An Application of the Cost-of-Illness Method from the Perspective of the Public Health System in 2011

Background

Obesity is a global public health problem and a risk factor for several diseases that financially impact healthcare systems.

Objective

To estimate the direct costs attributable to obesity (body mass index {BMI} ≥ 30 kg/m²) and morbid obesity (BMI ≥ 40 kg/m²) in adults aged ≥ 20 incurred by the Brazilian public health system in 2011.

Settings

Public hospitals and outpatient care.

Methods

A cost-of-illness method was adopted using a top-down approach based on prevalence. The proportion of the cost of each obesity-associated comorbidity was calculated and obesity prevalence was used to calculate attributable risk. Direct healthcare cost data (inpatient care, bariatric surgery, outpatient care, medications and diagnostic procedures) were extracted from the Ministry of Health information systems, available on the web.

Results

Direct costs attributable to obesity totaled US$ 269.6 million (1.86% of all expenditures on medium- and high-complexity health care). The cost of morbid obesity accounted for 23.8% (US$ 64.2 million) of all obesity-related costs despite being 18 times less prevalent than obesity. Bariatric surgery costs in Brazil totaled US$ 17.4 million in 2011. The cost of morbid obesity in women was five times higher than it was in men.

Conclusion

The cost of morbid obesity was found to be proportionally higher than the cost of obesity. If the current epidemic were not reversed, the prevalence of obesity in Brazil will increase gradually in the coming years, as well as its costs, having serious implications for the financial sustainability of the Brazilian public health system.     

Will All Americans Become Overweight or Obese? Estimating the Progression and Cost of the US Obesity Epidemic

We projected future prevalence and BMI distribution based on national survey data (National Health and Nutrition Examination Study) collected between 1970s and 2004. Future obesity-related health-care costs for adults were estimated using projected prevalence, Census population projections, and published national estimates of per capita excess health-care costs of obesity/overweight. The objective was to illustrate potential burden of obesity prevalence and health-care costs of obesity and overweight in the United States that would occur if current trends continue. Overweight and obesity prevalence have increased steadily among all US population groups, but with notable differences between groups in annual increase rates. The increase (percentage points) in obesity and overweight in adults was faster than in children (0.77 vs. 0.46-0.49), and in women than in men (0.91 vs. 0.65). If these trends continue, by 2030, 86.3% adults will be overweight or obese; and 51.1%, obese. Black women (96.9%) and Mexican-American men (91.1%) would be the most affected. By 2048, all American adults would become overweight or obese, while black women will reach that state by 2034. In children, the prevalence of overweight (BMI >/= 95th percentile, 30%) will nearly double by 2030. Total health-care costs attributable to obesity/overweight would double every decade to 860.7-956.9 billion US dollars by 2030, accounting for 16-18% of total US health-care costs. We continue to move away from the Healthy People 2010 objectives. Timely, dramatic, and effective development and implementation of corrective programs/policies are needed to avoid the otherwise inevitable health and societal consequences implied by our projections .     

Who Are the High-Cost Users? A Method for Person-Centred Attribution of Health Care Spending

Objective

To develop person-centered episodes of care (PCE) for community-dwelling individuals in the top fifth percentile of Ontario health care expenditures in order to: (1) describe the main clinical groupings for spending; and (2) identify patterns of spending by health sector (e.g. acute care, home care, physician billings) within and across PCE.

Data sources

Data were drawn from population-based administrative databases for all publicly funded health care in Ontario, Canada in 2010/11.

Study design

This study is a retrospective cohort study.

Data collection/extraction methods

A total of 587,982 community-dwelling individuals were identified among those accounting for the top 5% of provincial health care expenditures between April 1, 2010 and March 31, 2011. PCE were defined as starting with an acute care admission and persisting through subsequent care settings and providers until individuals were without health system contact for 30 days. PCE were classified according to the clinical grouping for the initial admission. PCE and non-PCE costs were calculated and compared to provide a comprehensive measurement of total health system costs for the year.

Principal findings

Among this community cohort, 697,059 PCE accounted for nearly 70% ($11,815.3 million (CAD)) of total annual publicly-funded expenditures on high-cost community-dwelling individuals. The most common clinical groupings to start a PCE were Acute Planned Surgical (35.2%), Acute Unplanned Medical (21.0%) and Post-Admission Events (10.8%). Median PCE costs ranged from $3,865 (IQR = $1,712-$10,919) for Acute Planned Surgical to $20,687 ($12,207-$39,579) for Post-Admission Events. Inpatient acute ($8,194.5 million) and inpatient rehabilitation ($434.6 million) health sectors accounted for the largest proportions of allocated PCE spending over the year.

Conclusions

Our study provides a novel methodological approach to categorize high-cost health system users into meaningful person-centered episodes. This approach helps to explain how costs are attributable within individuals across sectors and has applications in episode-based payment formulas and quality monitoring.     

Medicaid and the Mainstream: Reassessment in the Context of the Taxpayer Revolt

California''s Medicaid program—Medi-Cal—attempted to implement the ideal of mainstream medical care for the poor by giving program beneficiaries a “credit card” for use in the private health care marketplace. This exposed the program to the perverse economic incentives of the fee-for-service, costplus health care system, and contributed to a high rate of increase in program costs. Attempts to control costs have been equally perverse, resulting in low payment rates, the second-guessing of physician professional judgments, the probing of medical and fiscal records, and the use of computerized surveillance systems.Attempts to shift to the use of more efficient delivery systems have had small success. Attempts to attain cost containment through restructuring the Medi-Cal program have been rejected in the name of the mainstream ideal. Costs have continued to escalate, with annual increases as high as 20 percent in some years. Medi-Cal now costs $4 billion per year, the largest single program in California state government.The taxpayer revolt in California is creating a fiscal crisis that will force rethinking of the premises of publicly funded health care for the poor, and a restructuring of strategies for reaching that objective. In the short run, it appears that the issue may not be whether the indigent will have access to mainstream medical care, but whether they will have access to any medical care. In the longer run, the crisis should represent an opportunity for building a system of health care that can serve the financially disadvantaged at a cost tolerable to our society.